The Aggressive Enforcer

An Interview with Lanny Breuer, Assistant Attorney General for the U.S. Department of Justice Criminal Division

May/June 2011

ByDick Carozza;photos by Joshua Roberts

Lanny Breuer is emphasizing high-impact, white-collar criminal enforcement as the U.S. assistant attorney general. His team's work is starting to pay off.

Photo by: Mathew Sturtevat

Lanny Breur has been called a consensus builder and visionary, but he just wants to catch some crooks.

Breuer was confirmed as assistant attorney general (AAG) of the Criminal Division of the U.S. Department of Justice (DOJ) on April 20, 2009. The National Law Journal recently named Breuer as one of its "visionaries" in the Washington, D.C., legal community. The journal said Breuer "has ushered in an expanded view of criminal investigations and prosecutions. The centerpiece in Breuer's Criminal Division is high-impact, white-collar criminal enforcement, a reflection of the administration's focus on combatting financial fraud. … Breuer's team is bringing traditional law enforcement techniques into the white-collar arena."

Breuer manages six deputy assistant attorneys general and 16 sections within the Criminal Division. The Fraud Section handles a diverse list of types of crimes — from investment fraud schemes to identity theft and violations of the Foreign Corrupt Practices Act (FCPA) to health-care fraud and everything in between.

Breuer and other government prosecutors promote the new Financial Fraud Enforcement Task Force, which the Obama Administration established in November 2009 to "hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery," according to the task force website. The task force has created financial fraud coordinators in every U.S. attorney's office.

Breuer said, during a December 2009 Senate hearing, that the task force "will take full advantage of the new legislative authorities Congress provided us to investigate and prosecute financial fraud. Congress passed the Fraud Enforcement and Recovery Act earlier this year with broad bipartisan support, and the president signed it into law on May 20, 2009."Breuer began his career prosecuting violent and white-collar crime as an assistant district attorney (ADA) in Manhattan. "I spent many years defending clients in white-collar investigations, so even before I became assistant attorney general, I was very familiar with the issues that white-collar investigations present," Breuer said during a recent Fraud Magazine interview. "I think it's tremendously important to hold accountable criminals engaged in these kinds of schemes, many of whom have had other choices."Breuer will be a keynote speaker at the 22nd Annual ACFE Fraud Conference and Exhibition, June 12–17, in San Diego, Calif.

Why did you decide to become a lawyer and later a prosecutor? Why is the "rule of the law" important to you? What in your background compelled you to fight injustice?

It was always my dream in law school to be a prosecutor, which is why the first job I took was as an ADA. Without reading too much into it, I may have been pulled in that direction because my mother lost her parents in the Holocaust and came to this country, like my father, with nothing. They both witnessed the devastation that a regime as brutal and unfair as Hitler's wrought on an entire people, and somewhere along the way they instilled in me a distinctly American passion for the rule of law and the pursuit of justice. I'm grateful to get to go to work every day trying to uphold those values.

Many of the white-collar crimes you investigate are global in nature. What groups and agencies do you work with internationally? What mechanisms do you have in place to make sure that information is communicated among all the players?

The FCPA was signed into law in 1977, yet the Department of Justice and the Securities and Exchange Commission (SEC) have stepped up their efforts in the past few years to monitor FCPA compliance, which has led to an increase in cases. Why the greater emphasis?I've said before that I think foreign bribery is a serious problem. Corruption weakens political institutions and threatens democratic stability. The FCPA is an important enforcement mechanism that allows us to go after the problem of foreign bribery, and I think our stepped-up efforts have had a real effect on the way U.S. and foreign corporations do business. FCPA enforcement roots out foreign corruption and deters it from taking hold in the first place. We've had a lot of success in this area in the past couple of years, and so you can count on our continued emphasis in this area.

Some say that the FCPA is bad for business and puts U.S. companies at a competitive disadvantage. How do you respond?

I've heard these criticisms before, and they don't go very far. Saying that FCPA enforcement is bad for business is a little like saying that our public corruption prosecutions are "bad for government." It doesn't make sense. Our FCPA work is vital to ensuring the integrity of our markets, and it helps make the international business climate more transparent and fair for everyone. As for whether FCPA enforcement puts U.S. companies at a disadvantage, over the past five years more than half of our corporate FCPA resolutions have involved foreign companies or U.S. subsidiaries of foreign companies. Also, other countries — like the U.K. — are following our example and stepping up their enforcement considerably.

How does the DOJ encourage firms to self-report rather than wait for investigators?

There are at least two excellent reasons for firms to self-report. For one, it's the right thing to do. For another, though, and I've said this many times before, companies will receive meaningful credit for coming in on their own. The best recent example I can give involves a series of cases we resolved last November against the freight-forwarding company Panalpina and a number of oil and gas service providers. In that investigation, Panalpina had engaged counsel to investigate their activities in close to 50 jurisdictions; they hired an outside audit firm to do forensic analysis and they reported the results of their investigation in dozens of meetings and calls with the DOJ and the SEC. It was partly because of their extensive cooperation that we entered into a deferred prosecution agreement with the Panalpina parent company.

The federal government's Medicare Fraud Task Force recently brought criminal charges against doctors, nurses and health-care company executives — 114 people in nine cities — in what was called the largest-ever health-care fraud takedown. The defendants allegedly cheated the government out of a total of more than $225 million in false billing schemes. Since the inception of the task force in 2007, 1,000 people have been charged in false billing schemes totaling more than $2.3 billion. How has this team been able to investigate this many cases? Have your methods become more sophisticated?

The Strike Force started in 2007 in one city — Miami. The next year, we expanded to Los Angeles, then Houston and Detroit and several other cities. And in February of this year, we announced the expansion of the Strike Force to Chicago and Dallas, bringing the total number of Strike Force locations to nine. As you can see, we've devoted significant resources to beating back Medicare fraud and holding doctors, nurses and others responsible for cheating the system. On top of that, the Strike Force uses sophisticated data-driven methods to identify and bring fraudsters swiftly to justice.

In 2009, Attorney General Eric Holder dropped criminal charges against the late U.S. Senator Ted Stevens (who died in 2010), which vacated the subsequent criminal conviction, due to questions of prosecutorial misconduct. Can you briefly describe some of the reforms the Justice Department has introduced after this trial?

Since the Stevens trial, we've instituted a number of very important reforms, including a rigorous training curriculum for all federal prosecutors and mandatory annual discovery training. On top of that, the Public Integrity Section, which prosecuted Senator Stevens, has a dynamic new chief and principal deputy, and we've hired lots of new lawyers into the section. More than that, though, you can see the effect of these changes in the remarkable success the section is having. Recently, we've had a string of important trial convictions — of a Puerto Rican senator and local businessman on bribery charges, a Kentucky politician on vote-buying charges, a former U.S. Army major and his wife on bribery and money laundering charges, a Congressional staffer who accepted an all-expenses paid trip to the 2003 World Series and the late Senator Edward Kennedy's office manager for having paid himself $75,000 in authorized bonuses.

Since 1988, Dr. Joseph T. Wells, CFE, CPA, founder and Chairman of the ACFE, has emphasized not just detection but, even more importantly, prevention and deterrence of fraud. How does that philosophy jibe with that of the DOJ's Criminal Division?

Obviously our prosecutors, working with federal and state and local law enforcement, are working hard to detect crime. But prevention and deterrence are also extremely important goals of ours. To the extent that our white-collar crime prosecutions — and all our other prosecutions — cause others to stop and think before breaking the law, that's a huge benefit of our efforts.

Our members often are the foot soldiers battling fraud in our communities. What advice can you give young fraud examiners, experienced Certified Fraud Examiners and all those in between?

Fraud examiners are, as you say, often on the front lines, and I would tell them — young and old — that when they see something that doesn't look right, they should do something about it. That's not always easy to do, but it's important, and it's part of their mission. They should also know that we prosecutors depend upon fraud examiners, auditors, investigators, the U.S. inspector general community and others to report fraud when they see it. They're often the first to be able to detect problems.

One of Dr. Wells' passions is to give colleges and universities the tools and support to train budding fraud examiners through the ACFE's Anti-Fraud Education Partnership. Do you ever have a chance to counsel and encourage students? If so, what are some things you tell them?

Absolutely. I take every chance I get to advise students and young lawyers. A great honor I had last year was to speak at my son's high school graduation. I told those students, like I've told others, to find things to do that excite them and people to be with whom they love and respect. I also told them to push themselves in their careers and their personal lives and, no matter what, to pursue some form of public service, whether through a career in government, pro bono work or other kinds of community service. I think it's important to have a wide variety of experiences when you're young and then to do what inspires you.

Though it might not be directly related, what in your time as special counsel to President Bill Clinton now helps you in your pursuit of white-collar criminals and fraudsters?

When I worked in the White House, I was a zealous advocate for the president and for the institution of the presidency. That was a memorable period in my career, and it helped me become a better lawyer. I think that experience, like others I've had in my legal career, have helped me do the job I have today, not only in white-collar crime cases but in all the other work we do as well.

Former Clinton White House Counsel Lanny Davis once said about you in The Washington Post, "Aside from having a fine-tuned legal mind, his greatest talent is that he observes people, takes their measure, understands what part of them he can work with and finds a way to depersonalize the disagreement. I once said to him, ‘You ought to be a marriage counselor.' " How do these traits help you in your current position?

I'm not sure how good of a marriage counselor I'd be, but I am very proud of how in the last two years we've been able to grow the Criminal Division to nearly 600 lawyers, all of whom are working together on the vitally important tasks of keeping our people safe and putting criminals behind bars. There's also new leadership in a number of our sections, including the Fraud Section; the Asset Forfeiture and Money Laundering Section; the Public Integrity Section, like I mentioned; the Capital Case Unit; and the Narcotic and Dangerous Drug Section. It's an exciting time, and I'm enthusiastic about working with so many talented and dedicated people.

What are some of the topics you will be covering in your message to attendees at the 22nd Annual ACFE Fraud Conference and Exhibition?

You can bet that I'll talk about our fraud prosecution efforts. Beyond that, though, you'll just have to wait and see!

What is the most enjoyable part of your position? How do you juggle your many duties?

Being AAG is an amazing job that I get excited about every day. It's a privilege to work with so many dedicated prosecutors, law enforcement agents and others in the department. When you have a great team around you, as I do, juggling many responsibilities becomes a lot easier.

As head of the U.S. Department of Justice's (DOJ) Criminal Division, Lanny Breuer oversees nearly 600 attorneys who prosecute federal criminal cases across the country and help develop criminal law. He also works closely with the nation's 93 U.S. attorneys in connection with the investigation and prosecution of criminal matters in their districts.

According to the DOJ, he has been a leading voice on policy issues related to criminal law enforcement, including the scope of prosecutors' discovery obligations in federal criminal cases and sentencing disparities between crack and powder cocaine offenses.

He regularly testifies before Congress on the Administration's policy initiatives and advises the attorney general and the White House on matters of criminal law.

Breuer began his legal career in 1985 as an assistant district attorney in Manhattan, where he prosecuted violent crime, such as armed robbery and gang violence, white-collar crime and other offenses. In 1989, he joined the law firm of Covington & Burling LLP, where he worked until 1997, when he joined the White House Counsel's Office as special counsel to President William Jefferson Clinton. As special counsel, Breuer assisted in defending President Clinton in the Senate impeachment trial.

He returned to Covington in 1999 as co-chair of the White Collar Defense and Investigations practice group, specializing in white-collar criminal defense and complex civil litigation. In 2009, the Obama Administration appointed him to his current position.

Breuer received his Bachelor of Arts from Columbia College in 1980 and his law degree from Columbia Law School in 1985.

The Association of Certified Fraud Examiners assumes sole copyright of any article published on www.fraud-magazine.com or www.ACFE.com. ACFE follows a policy of exclusive publication. Permission of the publisher is required before an article can be copied or reproduced. Requests for reprinting an article in any form must be e-mailed to FraudMagazine@ACFE.com.

Dr. Joseph T. Wells, CFE, CPA, founder and Chairman of the ACFE, recently announced his resignation from the American Accounting Association in a dispute over the organization's titling of the AAA's "Forensic and Investigative Accounting" section.